Centre Expands Collateral-Free MSME Financing To ₹10 Crore Under Revamped CGS; Clarifies Subsidy, Equity Support Figures
The Central Government in response to details of financial support and credit facilitation for the Micro, Small and Medium Enterprises (MSMEs) has clarified that effective April 01, 2025, the Ministry of MSME has expanded collateral-free financing by enhancing CGS coverage up to Rs. 10 crores with reduced guarantee fees. Under the credit-linked subsidy schemes, tabulated...
The Central Government in response to details of financial support and credit facilitation for the Micro, Small and Medium Enterprises (MSMEs) has clarified that effective April 01, 2025, the Ministry of MSME has expanded collateral-free financing by enhancing CGS coverage up to Rs. 10 crores with reduced guarantee fees.
Under the credit-linked subsidy schemes, tabulated statistics indicated that Government has in the last three financial years i.e FY 2022-23 to FY 2024-25 assisted 2.34 lakh units with Rs. 7,918 crores subsidy disbursed.
Government clarified that since the inception of Self Reliant India (SRI) Fund in 2021 till October 31, 2025, 671 MSMEs have been assisted by way of investing more than Rs. 14,927 crores. Government stated that under the PM Employment Generation Programme and PM Vishwakarma Scheme, launched in 2023 is aimed at providing holistic support to artisans/craftspeople in 18 traditional trades. To help Manufacturing and Services enterprises to set-up new micro enterprises, in the non-farm sector with project cost of Rs. 50 lakh and Rs. 20 lakh, the Schemes provide for
- (i)Margin Money subsidy upto 35%
- (ii)Loans upto Rs. 3 lakh with interest subvention of max upto 8%
The Credit Guarantee Scheme (CGS) implemented for MSMEs was revamped following a corpus infusion of Rs. 9,000 crore into Credit Guarantee Fund Trust for Micro and Small Enterprises. It was also clarified that under the Self-Reliant India Fund, Rs. 50,000 crore equity support was infused together with setting up of an integrated MSME Dashboard to track its effectiveness. To provide credit guarantee for loans the ceiling of guarantee coverage was enhanced periodically from Rs. 2 crores to Rs.5 crore and thereafter, to Rs. 10 crores with 0.37% per annum Standard Rate of the Annual Guarantee Fee.
As for steps taken to promote women entrepreneurs, Government stated that Public Procurement Policy was amended in 2018 mandating Central Ministries/Departments/Undertaking to procure at least 3% of their annual procurement from women entrepreneurs.
To support Women Entrepreneurs under Credit Guarantee Scheme for Micro and Small Enterprises, Government has provided 100% subsidy for Women owned MSMEs on cost of ZED certification. Under various schemes, concessions in guarantee fees, higher subsidy rates for women were highlighted. As a part of skill development and training, the Government rolled out special incentives for women entrepreneurs alongside digitalisation and monitoring systems to boost MSME competitiveness.
In Maharashtra specifically, 17 Common Facility Centers were approved in Pune, Nashik, Aurangabad, Kolhapur, as per Ministry of MSME answer to cluster development. The clusters included printing, auto components, engineering, textiles, garments, food processing, etc.